I know that most amateur operators simply sign at the beginning or end of a message, like
The weather is good, Kz1XXY
Would it also be customary to say that in phonetic form?
Kilo zulu 1 X-ray X-ray Yankee
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The choice of using phonetics ('alpha, bravo, charlie, …') versus plain alphabet sounds ('aye, bee, see, …') should be, and in my limited experience usually is, made based on how likely the recipient is to need them to understand.
Here are two extreme cases:
A contact made using a FM repeater at close range, among people who already know each other, does not need to use phonetics because there is little noise on the received audio and the people already know what they'll be hearing.
On the other hand, someone calling CQ on simplex using SSB either for a contest or DXing will always use phonetics, because they're trying to call anyone they can, particularly operators at the longest possible range, and so they want to maximize understandability when the recipient hears lots of noise and has never heard this particular call sign before.
If someone is doing, say, VHF FM simplex, you might hear either one. If someone is continuing a discussion rather than making the initial contact, they might not use phonetics because they're doing it for the legally required identification rather than to communicate to the other party. And so on.
In fact, hams use phonetic alphabet for their call signs (and also QTH) most of the time. The reason is simple - when you are establishing a QSO you don't know how well the other operator hears you. Maybe your signal is weak on her side, or maybe there is a QRM or QSB.
During an established QSO phonetic alphabet is used by two reasons. Firstly, you make sure that the other operator received your call sign correctly. I've been in a few situations when my suffix was recorded wrong (e.g. R2AU instead of R2AUK). Repeating your call sign is a polite way to say that it should be corrected. Secondly, all other hams may hear you as well, but you don't know how well they hear you. They may even hear only one of two hams. Repeating call signs using phonetic alphabet allows to specify who is talking and who she is talking to. Otherwise someone can think that, for instance, you are calling CQ, and intervene in the QSO.
By the way (very important!) you assumption that hams sign a message by telling a call sign is not quite correct. During the QSO hams use two call signs - the first one is who you are taling to, and the second is your call sign, always in this order. The obvious exception is when you are calling CQ.
This being said, during a long and stable QSO hams may get tired of repeating their call signs using phonetic alphabet all the time and start using regular letters, or even pronounce the call signs as if they were words.
Though this may seem somewhat counter-intuitive at first, I think it is also worth pointing out that certain call signs are better understood when the letters are pronounced together instead of the drawn out phonetic pronunciation of those letters. Of course this may depend highly upon the noise inherent in the band conditions. But I often find that many DX operators waste more time in repeating English phonetic voice sign transmissions when a quick burst of the letter pronunciation would be the most effective in a specific case. For example, NK2I versus November Kilo Two India. It's 4 syllables of good formant transitions versus 9 syllables of less than perfect cadence transitions between word segments. So phonetics are not necessarily the best choice to increase the clarity of detection.
The answers so far seem to be mostly thinking about HF phone, where phonetic alphabets are customary. But in my area, practices are very different on VHF/UHF FM. Personally I find it quite annoying that someone identifies as "kay cee three zee bee gee" every twenty minutes on a distant repeater with scratchy copy that is even more difficult to hear over the wind noise in my convertible rolling down the highway. (That's with the top up; with the top down there's no point in trying to listen to a radio while driving on the highway.) I'd much prefer "kilo charlie tree zulu bravo golf". Personally I always use the ITU phonetic alphabet, even on D-STAR where it doesn't matter because the call sign is transmitted digitally simultaneously with the audio.
So to answer the question, around here it's customary to not use a phonetic alphabet on VHF/UHF FM, but I wish that it were. In my opinion, not using a phonetic alphabet is, well, amateurish. If nothing else, hams should be very familiar with a standard phonetic alphabet in case they need to pass information accurately in a stressful emergency situation.
In the US:
What are the FCC rules regarding the use of a phonetic alphabet for station identification in the Amateur Radio Service?
A. It is required when transmitting emergency messages B. It is prohibited C. It is required when in contact with foreign stations
Correct Answer D. It is encouraged
Note that the FCC does not say which phonetic alphabet to use.- but the ITU / NATO alphabet is probably the most common.